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Exec Describes Microsoft's 'Social Networking' Vision

By Kurt Mackie

05/08/08

A Microsoft executive involved with the company's Windows Live efforts outlined some of the company's ideas about cloud-based computing and social networking technologies Tuesday. The talk was presented by Brian Hall, general manager of the Windows Live Business Group, at the 2008 Merrill Lynch Technology Conference May 6.

Hall predicted that applications will be moving to a world that combines the "best of the PC" with "the best of the Web."

He depicted a software past in which social networking was once typically enabled by just a few "siloed applications," such as e-mail and instant messaging. Microsoft entered this space early on with its Hotmail and Windows Live Messenger offerings.

In contrast to this siloed approach, the future of social networking will bring more of a "people-centered platform," Hall said, "where stuff moves wherever I go, and that doesn't mean it's all in the same place."

The categories between social networking apps and e-mail/instant messaging apps are "very similar" and "it's really one category," Hall explained. He estimated that 448 million people are using Microsoft's Hotmail and Messenger applications.

"During the last 10, 12, 13 years, we've got 448 million active users," Hall said. "These are people that have logged-in in the last 30 days, meaning that they are actively involved with the service -- it's not just that they have an account that they haven't checked in a while."

Live Mesh, which Microsoft unveiled about two weeks ago at the Web 2.0 conference, is Microsoft's planned approach for bringing together communications, applications and files.

"We see a fantastic opportunity to take the best of the PC, the Web and the phone and to create a mesh of files that is accessible from all of these places but is ultimately provisioned at your site," Hall said.

One example of such aggregation is Windows Live Mail, which Microsoft released last summer in beta form. The application can pull together all of a person's various e-mail accounts, Hall said. It solves the problem of dealing with multiple accumulated e-mail accounts.

Another way that Microsoft has been working to interconnect is with social networking partnerships. Hall said that Microsoft has established partnerships with "most of the leading social networks" to have address book synchronization and roaming. Users can provide their Windows Live or Hotmail credentials at those social networking sites, he said. It moves people closer to using "a single address book approach."

"We see a future where the rich client and other kinds of software interact very closely with the services that are hosted," he said. He pointed to Live Mesh as an important component in that strategy by creating a file system for those interactions.

He also answered a question about Microsoft's failed acquisition bid for Yahoo.

"Certainly, [the acquisition of] Yahoo would have been an accelerator, but we made our offer, we've moved on, and now we're focused on how do we grow as fast as possible organically," Hall said.

Another question was about Microsoft's view of AOL, owned by Time Warner. A recent report has suggested that Microsoft may be in acquisition negotiations with Time Warner over AOL. Hall said that AOL has a strong position in the United States with its e-mail, portal and instant messaging. AOL's instant messaging application is "very strong." The company has strong positions in Germany in Russia.

"They certainly have a large customer base today in those markets, but at the same time they don't have an ad platform," Hall said of AOL. "Their search platform has been monetized by Google over the last at least two years. And if you look -- I'm not giving any secrets here -- at ComScore data or Nielsen or any of the tracking services for overall category share, they are not gaining share today."

On a question about the monopolization of search, presumably by Google, Hall said that Microsoft believes "we definitely can gain share of search." He saw greater opportunities in the use of contextual search technology to make that happen.

Hall's talk at the Merrill Lynch Technology Conference can be heard in its entirety, while available, at the Microsoft Investor Relations Web site.